Avaloq’s Pascal Wengi: «Wealth is a Long Game»
With its first client in Japan, market entry in the US and further expansion in Asia and the Middle East, banking software company Avaloq has entered a new phase of growth. This comes five years after its takeover by Japanese technology group NEC.
Avaloq has already been present in Singapore for 15 years and, from this international wealth management hub, is expanding its offering into the emerging markets of Malaysia, Indonesia, Thailand and Vietnam, as Pascal Wengi, Managing Director for Region International, explained at a media briefing in Singapore on Wednesday.
Global Footprint and Client Base
Founded 40 years ago in Switzerland by Francisco Fernandez, the company now employs 2,500 people across 11 countries and serves around 170 clients in 35 countries. Its clients are primarily banks and independent wealth managers, who in turn manage, with Avaloq software, approximately $5.1 trillion in client assets. Roughly a quarter of Avaloq’s business is from Asia.
Disruptive changes in the financial world – particularly the spread of artificial intelligence (AI) and the growing acceptance of cryptocurrencies – are also having a significant impact on Avaloq’s business model, Wengi said. The key challenge, he noted, is to deploy AI in ways that lead to efficiency gains for clients while at the same time ensuring cybersecurity.
Strategic Partnerships
To meet these demands, Avaloq maintains various strategic partnerships with other companies, including Blackrock for integration with its Aladdin platform, and fintech startup Kaspar& for integration into core banking systems.
Depending on the market, Avaloq takes a different approach in its client interactions, as Wengi explained to finews.asia. In traditional wealth management hubs such as Singapore or Hong Kong, the company offers so-called one-stop solutions, or systems that cover all functionalities needed to serve high net worth and ultra-high net worth clients.
Emerging Market Approach
In emerging markets such as Taiwan, Malaysia or Indonesia, where banking partners primarily serve retail or affluent clients, standardized software solutions are the priority, enabling cost-efficient servicing.
«Only in a subsequent phase are wealth-management functionalities added,» Wengi said, citing the collaboration announced last July with Taiwan's Cathay United Bank as an example.
Expansion in the Middle East and the US
With this dual-track strategy, Avaloq also aims to grow in the Middle East and the US. From its base in Dubai, the company has already acquired two Kuwaiti financial institutions as major clients. Wengi emphasized that winning new clients usually takes a great deal of time.
«Wealth management is a long game,» he noted.
Avaloq this year put its first foot on American soil. From New York, a local team has been tasked with developing the US market and the firm is leveraging as many synergies as possible with its Japanese parent company NEC, which is already well established locally.
But Wengi remains realistic: «It takes two to five years before we can reap the first harvest in this market.» Until then, Avaloq can rely on its strong market share in Switzerland and Asia.
